Tuesday 6 October 2009

Forex: GBP/USD: Pound plunges below 1.6000 on weak industrial production

Tue, Oct 6 2009, 08:44 GMT

FXstreet.com (Barcelona) - The Sterling has plunged about 100 pips from session high at 1.6048, after worse than expected Industrial production figures, back well below 1.6000, and giving away all the ground taken during the day.

UK Industrial production has declined 2.5% month on month and 11.2% year on year in August, against experts expectations of a 0.3% monthly gain and a 10.2 year on year decline. Manufacturing output has dropped 0.9% on the month and 11.3% year on year; the market consensus was a 0.4% monthly advance and a 9.1% year on year decline.

At the moment of writing, the Pound trades at 1.5940, with next support levels at 1.5925 session low and below here, 1.5880 and 1.5770 (Sept 28 low). On the upside, resistance levels lie at 1.6005/20, and above here 1.6050 intra-day high and 1.6125 (Sept 30 high), and 1.6200.

DATA SNAP: UK Mfg Output Slumps Unexpectedly In August

Tue, Oct 6 2009, 08:44 GMT

DATA SNAP: UK Mfg Output Slumps Unexpectedly In August

By Ilona Billington

LONDON (Dow Jones)--The U.K.'s manufacturing sector slumped unexpectedly by 1.9% in August from July as output in all thirteen sub-sectors reported a poor result, the Office for National Statistics said Tuesday.

On the year, manufacturing output declined 11.3%.

The data for August compare with a revised 0.7% rise on the month and a 10.2% fall on the year in July.

The drop came as a surprise. Economists surveyed by Dow Jones Newswires last week had expected that manufacturing output rose 0.4% on the month and fell 9.1% on the year in August.

The July data were originally reported as rising 0.9% on the month and declining 10.1% in year-on-year terms.

The monthly fall was the first drop since May this year although an ONS spokesperson did say that anecdotal evidence showed that there were various planned shutdowns in August which accounted for some of the decline, and possibly the larger-than-expected rise in July.

The seasonal adjustment would typically account for some of these seasonal shut downs but may not capture all of them, the ONS said.

The wider measure of industrial production also posted a disappointing performance in August, falling 2.5% on the month and 11.2% when compared with August 2008.

In July, industrial production rose 0.5% from June and was 9.3% lower in annual terms.

Economists had forecast this measure would rise 0.3% on the month and drop 8.6% in annual terms.

-By Ilona Billington and Adam Bradbery, Dow Jones Newswires; +44 20 7842 9452; ilona.billington@dowjones.com

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(END) Dow Jones Newswires

October 06, 2009 04:44 ET (08:44 GMT)

Copyright 2009 Dow Jones & Company, Inc.

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